Several blue chip stocks hit their 52-week lows, as investors continue to sell into quality stocks. Among the shares that fell to these lows were Bajaj Electricals, Coal India, Maruti Suzuki, Shoppers Stop, RBL Bank etc.
Among the other stocks that fell were IDBI Bank, Jagran Prakashan, TVS Motors Company, Jain Irrigation, Kalyani Forge, Maruti Suzuki India, Motherson Sumi Systems, Muthoot Capital Services, Nilkamal, RBL Bank, Shoppers Stop, Tata Elxsi and Tata Motors.
Investors have been dumping mid and small cap stocks and the worst impacted are from the auto and auto ancillary space.
In fact, auto stocks have been badly hit because of a slowdown and the government might announce measures going forward. The slowdown in the auto sector is also hitting banks, which are heavily lending to the two-wheeler space.
Unless buying emerges from domestic institutions, the broader markets are unlikely to stage a great recovery. Foreign Portfolio Investors have net sold in the Indian markets to the tune of nearly Rs 16,000 crores this month. Anymore aggressive selling may lead to a further fall in the markets.
One may have to be a little more careful and not catch a falling knife. However, nibbling into good quality names at this stage may not be a bad idea.